Roscosmos: Can new company modernize Russian space industry?

Details about Roscosmos, Russia’s new state space corporation, were revealed on July 7. A law adopted on July 1 is intended to help with the space industry’s reform. However, experts fear that the corporation may be inefficient in the long run.

Little was known until recently
about the new state corporation Roscosmos, which is supposed to replace the
existing agency and reform the country's space industry. The State Duma adopted
a law establishing it on July 1, but industry representatives declined to
comment until the law is approved by the president. Speaking at the Federation
Council on July 7,
the head of Roscosmos, Igor Komarov, answered a few questions.

According to Komarov Russian
space enterprises should become joint-stock companies over the next five years.
“To achieve this result, decisions have been made concerning the
decentralization and the empowerment of Roscosmos with the authority to carry
out effective reforms,” Komarov said at the Federation Council meeting “The task was set
up to ensure the transformation of more than 80 shareholding companies, design
bureaus and research institutes into joint-stock companies in a short period of
time.”

During the next stage, the
question of public-private partnerships and attracting private capital to the
space industry will be discussed. The main emphasis will be placed on reducing
budget expenditures for modernization through the implementation of export
contracts. According to Komarov, the reform of
the space industry will take up to 10 years.

However, experts are not certain
that these measures can solve the systemic crisis in the Russian space
industry. This situation has recently been discussed at the highest levels of
government.

“The systemic crisis includes
fundamental problems in the areas of public administration, economy,
international cooperation, technology and others,” Ivan Moiseyev, head of
Russia’s Space Policy Institute, told RBTH. “All of these problems should be
overcome simultaneously.” However, he believes that the foreign policy and
domestic economic situation are presently unfavorable.

According to Moiseyev, the new
state corporation will have to solve questions of economic modernization,
productivity, technological modernization of both production lines and the products
manufactured, as well as to introduce new quality control systems.

At the same time, state
corporations represent a new form of enterprise for Russia, Moiseyev notes.

“They are characterized by
combining the functions of a business entity and state regulations,” Moiseyev
says. “In the short run, a state corporation is capable of achieving results
through the focusing of efforts, as well as having a single organizational and
technical policy.”

“But in the long term, such a form
becomes inefficient,” Moiseyev concludes. “Specifically, this is due to the
monopolization of the scope of its responsibility and its slow response to
changing situations.”